What does it mean to create a scalable product as a marketing agency?

As a marketing agency ourselves, we’ve now built and scaled four different product offerings that get our clients $10k+ in new, monthly recurring business in 60 days. Honestly, it’s not that hard. You just need to know the secret to building and scaling.

The most important thing to do is have a system for consistent, repeatable lead generation. That means that you are always reaching out to new potential clients and building relationships with them (wink wink… we can help here)! If your systems work well, you should be on sales calls regularly. Perfecting your pitch here will make a big difference.

Your first few clients help you get the systems nailed down. Build a team to help you fulfill- create trainings, incentives, invest in tools and resources to help your team succeed. Then make everyone’s lives easier by automating & systemizing everything you can so no client falls through the cracks, and you can bring your cost of goods down.

Here’s the formula for agency success:

Consistent lead generation + stable sales + fulfillment + systemization = $$$$$

Of course, that’s a simplified overview of all the ups and downs being an agency owner brings, but most of these pieces are just details. Let’s break down the math. We’ll assume here for easy math that every new client pays $1,000 a month just to keep it simple.

Say you reach out to 1,000 new prospects a month. Approximately 10% (100) will engage with you, and 10% (10) of those who engage will get on a call. Let’s say you only close 10% of those you get on a call with; that is a new client every month.

Now don’t forget to account for churn. Realistically, not everyone you work with will be a good fit for you. Let’s say half of the new clients you get you don’t keep. Even with losing half of all new business in a year, you would have increased your MRR (monthly recurring revenue) by $6k a month, or $72k a year.

Here’s where it gets interesting: When you have an excellent outbound system, you should be able to turn up the dial, and you’ll see a corresponding increase in closed business. Instead of reaching out to 1,000 prospects a month, what if you double that and reach out to 2,000? Well, we’ll use the math above, and that will get you two new clients a month, and with 50% churn over a year, you will increase your MRR to $12k a month or $144k a year.

Next, you really work on refining your sales pitch. Instead of a 10% close rate, you get it up to 20%. Now you’re getting four new clients a month, and with 50% churn over a year, you’re increasing your MRR to $24k a month or $288k annually.

And now you work on getting your systems running efficiently. This leaves clients more satisfied with your service and could reduce your churn, helping you keep an additional client on your roster each month. So now, of the four new clients you get each month, you’re able to keep 3 of them with you, bringing you an MRR of $36k a month after a year. That is annual recurring revenue of $432k.

Then you work on the margins- after all, it’s not cheap to make $36k a month. You tinker and automate to get your costs down to a goal of 40% profit to start. Now, of that $36k a month, you walk away with $14.4k. Get that to 50%? Now you take home $18k.

That’s the recipe for success in action. Start with consistent and reliable lead generation, capitalize on a great sales pitch, produce a great product, and maximize your efficiency. Then you work on increasing each metric bit by bit, and you’re scaling FAST.